If you ever try comparing the debt situation in the US and Japan, someone will invariably say: Well, Japan can afford a lot more debt because it's all domestically owned, whereas US debt is owned by the Chinese.

It turns out this isn't really true, though unfortunately this destructive myth continues to dominate political/economic debates.

Yes, China holds a lot, but they're not dominant, and when you add it up, most debt is actually domestically held, just like in Japan.